How the Fresnel effect works and how to construct Physically-Based shaders in Blender?
[Pseudo explanation.]

The normal gives us the normal surface orientation for each surface point. The incoming output gives us the direction of incoming camera ray. In the "middle" of a sphere the normal will be pointing directly towards the camera, hence at that point (only) the incoming and normal vector will be equal.




We are especially interested in the small incoming angle, where the glossyness will be stronger. If we sample a surface area on the "side" of the sphere (from camera view) the incoming and reflected rays have a small angle.



The more rough the surface gets, the more rays will be reflected in the direction of incoming.


With the roughness converging towards 1, the ratio of incoming reflected to normal reflected direction will also converge towards 1. The ratio is represented by the slider, switching from normal glossy reflection to (fake) incoming normal reflection.